Something of Value That by Agreement Becomes the Property of the Lender

question 199

Multiple Choice

Something of value that by agreement becomes the property of the lender if the borrower defaults is called:

• A) a stock.
• B) a bond.
• C) collateral.
• D) a liability.

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Definitions:

Normal Balance

The side (debit or credit) where the balance of an account usually increases.

Account Category

A classification within accounting used to group similar types of accounts, such as assets, liabilities, equity, revenue, and expenses.

Accounts Receivable Subsidiary Ledger

is a detailed ledger showing individual transactions and balances for customers who owe money to the business, supplementing the general ledger.

Control Account

A general ledger account that summarizes and controls the total amounts recorded in subsidiary ledgers.